Indexes augur well for China

Kuang deemed these figures a good sign for the whole economy as they reflected the "continuous upgrading of the consumption structure."

The latest CPI and PPI data also confirmed a series of positive changes since May. Other encouraging data include faster export growth and rising Purchasing Managers Index readings.

Exports jumped by 7 percent in May from a year earlier, outpacing the 0.9 percent increase in April and 6.6 percent drop in March, pointing to an improved external demand.

Both official and private PMI for manufacturing sector saw a rise in May from April, indicating renewed vigor in the sector.

Analysts expect other key economic indictors in May, including industrial output, retail sales and fixed-asset investment that are due to be released on Friday, to further confirm the recovery trend.

However, they also expect the weak improvement might not be substantial enough to persuade policymakers to adopt wider range of stimulus measures to prop up the economy.

Premier Li Keqiang had in a recent meeting asked local government leaders to take more proactive measures to keep their economies in the pink of health. He said while the government does not put GDP above everything else, "it does not mean that we don't want a reasonable economic growth rate".

The central bank responded to that call by announcing a "targeted easing" policy on Monday. It will cut reserve requirements for some lenders by 0.5 percentage point from June 16, especially those that support agriculture and small businesses.

The targeted easing is a compromise among different government agencies, as the central bank has fended off calls from other agencies to cut interest rates to spur the economy, citing additional liquidity would only add to ballooning debt and prop up industries plagued by overcapacity, The Wall Street Journal reported on Monday.

The latest inflation data could give proponents of cross-board reserve requirement cut a fresh ground to argue, citing the current moderate inflation would provide sufficient room for the central bank to loosen its monetary policy without risking CPI to rebound above 3.5 percent, the upper limit the government can tolerate.

Consumer price increases "won't impact the scale and pace of the ongoing mini-stimulus," said Lu Ting, head of Greater China economics at Bank of America Corp. Lu forecast that inflation will be "around" 2.5 percent for the next several months.

China consumer prices up 1.8% in April	China's inflation up 2.4% in March